RIKHABDAS JHAVERCHAND Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE short point, which arises for consideration, whether S. 153(2A) of the IT Act, 1961, is applicable to the facts of this case.

(2.) ON 12th March, 1984, the AO assessed the total income of the petitioners for the asst. year 1981 - 82 at Rs. 1,84,280 after disallowance of bad debts of Rs. 78,166. The appellate authority dismissed the appeal of the assessee. However, by order dt. 10th Jan., 1989, the Tribunal allowed the assessee's appeal and remanded the matter back to the AO with a specific direction to verify the correctness of the claim by calling for information from the debtors or by getting the details verified through the ITO, who assessed the debtors. With this specific direction, the Tribunal set aside the order of the CIT(A) and restored the matter relating only to bad debts to the file of the AO. Pursuant to the direction of the Tribunal contained in its order dt. 10th Jan., 1989, the AO completed the fresh assessment under S. 143 r/w S. 254. This was on 2nd July,1996. This was after making necessary enquiries as per the direction of the Tribunal. Against the said order dt. 2nd July, 1996, the assessee filed a revision petition under S. 264 of the IT Act, 1961, inter alia, contending that the fresh order passed by the AO on 2nd July, 1996, constituted fresh assessment as contemplated by S. 153(2A) and since the said order was passed after the expiry of two years from the end of the financial year in which the Tribunal passed the order under S. 254, the said order dt. 2nd July, 1996, was beyond the time -limit, i.e., 31st March, 1991, and, therefore, it was liable to be set aside. The contention has been rejected by the revisional authority vide impugned order dt. 16th Sept., 1999. Being aggrieved, the present appeal came to be filed by the assessee.

(3.) WE do not find any merit in the said contention. Sec. 153(2A) refers to an order of fresh assessment being passed pursuant to the assessment order being set aside by the Tribunal under S. 254. On the facts, the revisional authority rightly came to the conclusion that the Tribunal in its order dt. 10th Jan., 1989, had only directed the AO to verify the correctness of the claim for bad debts made by the assessee by calling for information from the debtors or by getting the details verified through the ITO, who assessed the debtors. In the circumstances, it cannot be said that the Tribunal had directed the AO to pass a fresh order of assessment as contemplated by S. 153 (2A). On the facts, S. 153(3) clearly stood attracted. Sec. 153(3), inter alia, lays down that the provisions of sub -ss. (1) and (2) of S. 153 shall not apply to assessments, reassessments and recomputations made on the assessee in order to give effect to any direction contained in an order under S. 254 of the Act. This provision is, however, subject to the provisions of S. 153(2A). In other words, if a matter falls under S. 153(2A) then, the fresh order of assessment shall be passed within the prescribed period of two years from the end of the financial year in which the order is passed by the Tribunal under S. 254. However, on the facts, S. 153(2A) is not attracted. The case falls under S. 153(3). Hence, the revisional authority was right in passing the impugned order. The appeal stands accordingly disposed of.